A board of directors is an organization elected to represent the owners/stockholders of a company. They act as a fiduciary to protect their investments. They formulate a high-level strategy for the company and supervise management by regularly meeting with and supporting high-level executives, including the CEO. They also develop governance systems by electing officers to specific posts, such as chair or president of the board.

In general, most boards are made up of a mix of inside and outside members. These members are familiar with the internal workings of an organization. They also include qualified people who aren’t employees but are knowledgeable in a specific field. Some countries have laws governing the structure of the board of directors of a company. These laws set standards for how many members are elected and for how long their terms view it now last.

In general, boards’ primary duties include establishing corporate policies for management and oversight as well as deciding whether or not to issue a dividend or stock options, or any other programs for repurchase of shares and appointing or firing top management as well as bringing on or removing new board members. They also make major decisions such as mergers and acquisitions and also select committees that focus on specific areas, like audit or compensation.

Another major responsibility is protecting shareholder interests through promoting transparency and providing shareholders with timely and accurate information, especially when it comes to financial reporting and disclosure. As a result, it is essential that a business has an effective board of directors to ensure its sustainability and success. Investors must also know the role and procedure for election of a board of directors because their decisions can have a major impact on the profitability of a business.